In the contemporary business world, more and more companies are entering the market and striving for the same target group.
As a result, competition grows more vicious with each passing day and businesses ought to find ways to reduce customer churn and to gain a competitive advantage over others. One way to gain such is through a philosophy known as lean management.
What is Lean Management
Lean management is a concept, an approach to running a company by bringing exceptional value to your customers via continuous improvement.
Its implementation aims to achieve small, yet incremental changes in business processes, on a regular basis, in order to result in higher efficiency, quality, and customer satisfaction. Thanks to its nature, lean management has become a widespread process across many industries and fields.
How lean management came into being
The idea about a boost in efficiency and quality came in the late 1940s by Toyota. Their idea was to enhance customer satisfaction by eliminating all processes which do not contribute or bring any value to the end client.
The two main pillars of lean management are to seek continuous improvement of the problem and to pay close attention to consumers’ feedback.
This philosophy achieved great results and established the car manufacturing company very highly in the eyes of customers. As a result of that, many other companies embraced the lean manufacturing process in their own industries. Whether they’re business-to-business (B2B) or business-to-consumer (B2C) oriented and have scored substantially better results than before.
Simply put, lean management can also be referred as “waste management”; regardless of whether you’re owning a profit-driven business or an NGO, you need to discontinue processes which are not working or resulting in loss of sales; you need to eliminate malfunctioning programs; most importantly, you need to acknowledge the customer’s point of view, in order to identify opportunities.
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Benefits of Lean Management
Lean process management has a wide variety of applications in the modern business world and even a wider list of benefits. Here are some of the most ubiquitous:
- Enhanced quality – by eliminating redundant processes, the quality of the market offering inevitably improves, as your employees will be free to focus on quality control rather on “wasteful tasks”.
- Sustainability – less redundancy in business processes that do not contribute in any way means higher sustainability and better adaptability in the long-run.
- Stronger brand recognition – your brand reputation will surely rise once you pay attention to your customers’ needs and reduce noxious processes.
- Manpower reductions – lean process management helps you get more things done with fewer people. When the process is fully optimized and made efficiently, your employees will produce faster and will not waste time on menial tasks.
- A decrease in cost and an increase in profits – higher productivity and better quality with less redundancy mean a significant cut in an increase in sales.
- Reduced risk of overbuying and less reduced space – with lean management space will be created due to the waste reduction process.
This is because the reduction in raw inventory will save up additional space which can be utilized in a more efficient manner, such as buying inventory for the production of a new product.
And this is just a cursory list of the full extent of Lean Management’s power. However, like any other process implementation, this, too, has limitations.
Drawbacks of Lean Management
Even processes that aim for quality improvement face difficulties and can sometimes backfire. Here are some of the most renowned disadvantages of lean management:
- Resistance among employees – it is a general rule that many employees are reluctant to embrace change, especially if they’ve been in the company for a long time.Therefore, it is obligatory to provide pieces of training and to make your coworkers understand the need to embrace lean management as a mandatory process for growth.
- Inventory problems – holding a lower amount of stocks is a traditional practice with lean management in order to cut extra costs. However, this would make you dependent on your suppliers.That way, the timely and efficient delivery of goods will be of vital importance to you and any disruption of inventory processes can cause plenty of headaches.
- High implementation cost – implementing lean in a company that has never used it before might force all ongoing production processes and systems to end in their present state.This, in turn, will result in higher costs in regards to organizing training for employees or bringing new equipment. Such a limitation can be noxious for small and mid-sized companies whose financial capabilities are easily depletable.
- Extra costs from implementing a proper IT system – A process such as lean depends on complex procedures and constant monitoring. Thus, it would oblige you to implement proper enterprise resource planning (ERP).Only through such systems, you can accurately monitor what is happening within the company and what processes are menial or redundant. This, however, can be a costly solution, especially for smaller companies.Regardless that lean management aims to improve quality, such disadvantages remain issues to many.
Implementing Lean Process Management in Your Business
Here is a step-by-step guide on how to employ lean process management in your company:
Step 1: Set Clear Goals
Before you start, you need to find your “why”. Many organizations know how to carry out their processes but they don’t know why they’re doing them.
Therefore, you must know where you are right now, where you’re heading, and by what means you’re reading that destination. If you’re to ignite this philosophy change in your organization, you need to convince your team first. This can only be achieved by setting clear goals with a specific strategy.
Then, you’ll be able to set a clear path for others to follow, to motivate their thinking, and to navigate their work processes by diminishing hindering processes.
After you’ve defined clear goals, it’s time for the real challenge – asking others to embrace this idea
Step 2: Ensure Your Staff is Coached and Prepared
The “one-man-army” philosophy is long gone in the contemporary business world. No matter how many great ideas or strategies you have, if you cannot find the right team to support you, you will be out of the race in no time.
As a result, you must prepare your team for the upcoming change. Something more – you need to convince them to embrace the lean philosophy and to coach them on how to carry out their everyday activities with their new lean mindset.
However, you need to note that dealing with the human factor can sometimes thwart your plans and make the working process even more complicated. This is because convincing everyone to embrace something different might be a major challenge – remember, most people are afraid or reluctant to change.
Therefore, it is up to you to familiarize your coworkers with the lean management philosophy, to explain to them its benefits from both an organizational and a personal perspective. You need to convey to them that this concept is tightly connected to adding value.
This, in turn, will ideally result in higher profits for the company. And greater opportunities for them do continuously develop in a well-respected company.
People avoid change not because they don’t believe in it. But because they’re afraid that they won’t be part of it. As a result, it is up to you to explain to them that all of you, together, should embrace the lean philosophy and develop, both as individuals and as a team.
Step 3: Introduce Your Team to the 5 Lean Management Principles
Once you’ve made your team embrace the change, you’ll have to introduce them to the five main lean management principles.
The value is the part of the solution that your client is desperately willing to pay for. Any additional activity which doesn’t bring value to the end product or customer is considered redundant. Thus, prior to starting with anything, you must first identify the value that you want to deliver to your target audience.
You should note that when identifying value, you should be looking at the big picture. It is mandatory to be taking into consideration all actions connected to the processes from producing equipment to its dispatchment. Otherwise, you might make a wrong judgment and identify a valuable process/employee as waste, or vice-versa.
Map the Value Stream
This is the step in which you need to map the workflow of your organization. You have to include all the people and actions involved in creating and dispatching your end product to the client.
By doing the map, you’ll be able to visualize the whole production process. You can then identify which of the involved people or actions make the process tardy and ineffective. This “big picture” will enable you to easily identify all the menial steps which bring no value and to cross them out.
Follow this link for more information on how to implement value stream mapping into your processes.
Create a Flow
Next, you need to ensure that this workflow remains efficient and smooth. Even though this is not an easy task, you need to monitor the process so that it always brings value
This step is extremely vital as it consists of monitoring the processes that you have mappe. And making sure that they run smoothly.
It is important to note that creating a flow can be a pretty menial task itself. It requires a great amount of devotion, attention to detail, and critical thinking. Thus, there are two widely adopted ways to achieve it.
The first one is to choose the long road and go for manual flow creation. This is a cost-effective manner under which you should break up the work and processes into smaller segments and assign managers to measure specific KPIs in order to monitor if the maximum value is delivered and additional waste can be cut.
You should note, however, that if you and your co-workers lack time and have various responsibilities, this method might not be the best option, as it would deplete a substantial percentage of your time.
The second option is to go for specialized software that will monitor the flow on your behalf. It will achieve monitoring the sole process through workflow automation and will save you the trouble of micromanaging every single action, in order to gain the desired result.
Even though this is a slightly costly solution as opposed to the former one, it can be a real lifesaver, especially if time is precious and limited for you. Such software, that you may consider is Tallyfy, for example.
We’ll go more in-depth on how you can use Tallyfy in implementing lean management in the next section.
By definition, a pull system means that you bring a market offering to somebody provided there’s a demand for it. The difference between push and pull is that in the former strategy, managers assign tasks on their co-workers on a regular basis, even if these tasks are not of high priority.
When going for a pull strategy, the tasks are usually assigned in a queue. Each one of which with a specific priority. The idea here is that tasks will be assigned to workers only if they’re of high priority or if there’s a demand for it.
By establishing such a system, you’ll be able to optimize and utilize current stock inventory. Thus delivering the right product/service to the right audience at the right time.
When implementing lean process management, you need to focus on two things: cycle time and effectiveness of completion of tasks. The idea is to train your team to aim for shorter cycle times while effectively completing tasks.
Implementing the first four steps is only 50% of a job well-done. The remainder lies within successfully sustaining lean management and looking for opportunities to make the process even better.
If you want to do this step properly, it is mandatory that you trust your managers. And you must share your set of responsibilities with them. As much as micromanagement is efficient in many cases. Going through the aforementioned steps all by yourself can be difficult. And striving to be everywhere at the same time can cost a great deal of time and resources.
Thus, it is always a great idea to train your managers. Show them what you’re looking for, establish concrete KPIs. And let them carry out your tasks. Seeking continuous growth and improvement isn’t an easy task. However, it is a must when you’re striving to implement a process such as lean management.
If you have followed the last 3 major steps meticulously, you should have a convenient lean management system in your company adding value to customers. However, it is important to note that the process explained above can be really menial and time-consuming. Especially if done manually or from scratch.
Establishing a lean mindset isn’t that easy because it requires a lot of devotion, time, and expertise. As a result, following the aforementioned steps manually might cost you a great deal.
We live in the digital age, where all kinds of shortcuts are right at our fingerprints. This is why if you’re seeking to implement a lean system but lack the needed time or expertise, you can always use business process management software (BMPS) to automate tasks for you and help you out.
Automation in Lean (Process) Management
Such solutions can easily automate processes within your company as the software will manage their task-execution and alert your team once something is ready.
However, you need to keep in mind that many of the online solutions are pretty expensive; thus, if you’re on a shoestring budget, you might want to do very in-depth research on what the market has to offer. After all, the idea is to integrate software that would scale with your business and bring profit. Not cost you a sum beyond your planned budget!
Go for Tallyfy!
Such an online solution that you may use is Tallyfy, thanks to its wide array of features, interface flexibility and cost-effectiveness.
Tallyfy is a business process management software that helps you automate processes and move to execute business decisions faster without you and your team worrying about repetitive tasks.
Simply put, it is a cloud-based integration tool that aims to eliminate workflows and to make your life easier.
Let’s go through implementing the five principles above but with this software’s help:
Identify value with automation software
An essential part of identifying value for customers is through conducting primary research techniques and analyzing them afterward to identify new trends and be more competitive.
However, manually storing and analyzing survey results can cost you a great deal of time, which you might lack. Additionally, hiring somebody just for that would be an extra cost. A redundancy, according to the lean process management which you’re going for.
Through Tallyfy, however, you can easily set it to automatically collect and store survey data in your drive. While you can focus on other duties of a higher significance. Then, you’ll be able to have your specialists access it and analyze it. Without having to dig into hundreds of emails in order to get the results.
Additionally, through Tallyfy, you can identify value in other ways, too. You can set it in such a way that it will automatically notify you when somebody posts a review about your brand. That way you can always track what people think about your company. You can gain insights on what people are looking for and what you should focus on.
Map the value stream with Tallyfy
As handy as it may be, when done manually, this process can be really tardy and menial. This is because by the time you map the process, analyze your results, discuss them internally with your team, think of a solution, and decide on its implementation, your competitors might have already done this faster than you. Thus, you risk losing your competitive advantage by bottlenecking yourself with time-consuming tasks.
With Tallyfy’s help, however, mapping the value stream can turn from a menial responsibility to something effective and fast. Not only does the software allow you to map the process efficiently. It also provides you with the opportunity to manage how the process is doing even after the mapping period.
That way, it will be easier for you to identify potential wasteful tasks, bottlenecks, underperforming processes/employees, etc. Additionally, through this mapping, you and your coworkers can easily keep track of your to-do list and to mitigate the chance of missing a deadline.
Create an automation flow
Through automation software, it will be easier for you to manage the flow you’ve created. And to make sure that the implemented processes are going smoothly.
For example, you can set specific KPIs and notifications to alert you each time someone finishes a process. This way you can measure its performance and see what can be added, removed, or improved.
This BMPS allows to easily monitor the status of tasks, to prioritize them based on significance, and monitor ongoing deadlines. That way, you’ll be receiving notifications about each step and you and your co-workers will always be informed.
Establish a Pull System
The pull strategy mindset doesn’t need specific automation workflow software. However, the allocation of tasks and their monitoring does.
By implementing Tallyfy, you can monitor how tasks are going and if there are close deadlines. For example, imagine that there’s a demand for your product (let’s say software). You assign these tasks to your programmers.
You can create a flow that will automatically alert you once your programmers finish it and send you the information. That way, you don’t need to micromanage them or constantly view your email. You’ll be able to focus on your tasks and a notification will come once the work is done and sent.
The same rule applies when sending invoices or doing anything manually. Even though Tallyfy doesn’t directly contribute to the pull strategy, it proves to be an effective solution for automating tasks and implementing lean management in the long-run.
Continuously Improve Your Processes with Tallyfy
Based on the aforementioned steps, Tallyfy is indeed a tool that can optimizezprocesses. Streamline your operations, make processes more expedient, and scale with your business.
The best part about this cloud-based solution is that it is extremely affordable for smaller or mid-sized companies. It also has a free-trial option for you to try out. This gives you the opportunity to get the full extent of lean management implementation at a low-cost. And, in case you like it, you can always upgrade your subscription to a Basic, Pro, or Enterprise.
To wrap it up, lean management is a philosophy that proved to be a winning strategy and to benefit those who have implemented it. In a market swarming with competitors, you must add value and eliminate redundant (for customers) processes.
Nevertheless, implementing one, albeit it seems easy, can deplete a lot of precious time and resources. As a result, you should consider cost-effective automation software to simplify tasks and make the processes run even more smooth.
This is why we, from Tallyfy, are here to support you. Our software can handle multi-transactional complex tasks and support you in your lean quest while scaling with your business.
Give our free trial a change by clicking here and let us take care of the redundancies for you while you’re busy adding value to those who need it.